Linde Plc · NASDAQ:LIN
Linde — Non-Deal Roadshow (May 2005)
56 slides from Linde's roadshow presentation, May 2005
Slide 1: European Roadshow May 2005
Linde Group Linde Group European Roadshow May 2005 1
Slide 2: Disclaimer
Linde Group Disclaimer This investor presentation has been prepared independently by Linde AG (“Linde”). The presentation contains statements which address such key issues as Linde’s growth strategy, future financial results, market positions, and product development. Such statements should be caref
Slide 3: Contents
Linde Group Contents Linde Group 05 | Overview 07 | Cash flow 08 | Net debt development 09 | Working capital 10 | Key Rating ratios 11 | RoCE 12 | Q1 2005 Performance 14 | Outlook 2005 Linde Gas 16 | Global market positions 17 | 2004 Sales by region 18 | Sales development 2000 – 2004 by product segm
Slide 4: Contents (continued)
Linde Group Linde Engineering 29 | 2004 Sales and order intake 30 | Market positions by product segment 31 | Strengths of the business Material Handling 33 | Multi-brand strategy 34 | 2004 Sales by region and brand 35 | Improvement and growth initiatives 36 | Efficiency improvement programs 37 | New
Slide 5: Linde is a portfolio driven company
Linde Group Linde Group Material Handling Gas Engineering Forklift Trucks Industrial Gases Air Separation Plants Hydrogen Plants Warehouse Trucks Healthcare Natural Gas Plants Hydraulic Systems Ethylene Plants Linde is a portfolio driven company. Every Division must …. — have a leading market positi
Slide 6: Leading market position in all activities
Linde Group Leading market position in all activities Business Segment Market Position Main Competitors Linde Gas No. 2 in Europe Air Liquide, BOC, No. 5 worldwide Praxair, Air Products Linde Engineering Top 1-3 position Air Liquide, Technip in all activities Material Handling No. 1 in Europe Toyota
Slide 7: Cash Flow
Linde Group Cash Flow (all Divisions generate positive free cash flow) 1500 1,281 1249 1,145 1000 891 886 705 626 505 500 412 € million 400 10 0 -500 -4,034* -1000 1999 2000 2001 (IAS) 2002 (IAS) 2003 (IAS) 2004 (IAS) Operating cash flow Free cash flow before dividend * Includes acquisition of AGA 7
Slide 8: Net Debt and Gearing Reduction
Linde Group Net Debt and Gearing Reduction (Net debt = Financial debt – cash & cash equivalents and securities) (Gearing = Net debt / equity) 4.000 88.60% 100% 90% 74.90% 3.500 80% 68.30% 62.50% 70% 3.000 57.70% 60% 48.22% € billion 2.500 50% 40% 2.000 3.659 30% 3.264 2.814 20% 1.500 2.342 2.430 1.9
Slide 9: Working capital reduction
Linde Group Working capital reduction of €905 million over 3 years 2500 9500 8992 8856* 9000 2000 8833 8726 Working Capital (€ million) 8500 Sales (€ million) 1500 Working Capital 8000 Sales 1000 2101 1721 1513 1196 7500 500 7000 0 6500 2001 2002 2003 2004 Reach of material 85.6 days 71.0 days 60.6
Slide 10: Key Rating ratios improved
Linde Group Key Rating ratios improved (Including pensions & leasing) 10 105 102 96 9 9.0 95 EBITDA* / Net 7.7 Net debt / Equity 8 interest expense 85 7 6.5 75 76 6 EBITA* / Net 5 Net debt / Funds interest expense 4.7 65 from operations 3.8 4 3.9 55 Net debt / Capital 3.1 3.7 3.1 employed 3 45 2.8 4
Slide 11: ROCE
Linde Group ROCE We use ROCE as the key measure of success in the individual business segments and for the Group. 2002 2003 2004 Target 10% Group 7.0% 7.7% 9.5% (2005) 13% Linde Gas 9.6% 10.1% 10.9% (2008) 16% Linde Engineering 13.3% 11.7%* 17.0% (2005) 16% Material Handling 8.7% 9.7% 12.0% (2007) *
Slide 12: Good performance in Q1 2005
Linde Group Good performance in Q1 2005 (numbers excluding Refrigeration and amortization of goodwill) — Sales plus 6.9% to €2,124 million — Incoming Orders up 8.2% to €2,353 million — EBITA plus 13.0% to €165 million — Net profit increased 9.0% to €85 million — EPS of €0.71 (2004: €0.65) (cont’d…)
Slide 13: Good performance in Q1 2005 by division
Linde Group Good performance in Q1 2005 — Linde Gas & Engineering — Sales up 9.0% to €1,339 million — EBITA plus 11.8% to €170 million — Linde Gas — Sales up 7.8% to €1,038 million — EBITA plus 10.1% to €164 million — Linde Engineering — Sales up 23.1% to €357 million — Incoming orders up 12.3% to €
Slide 14: Outlook 2005
Linde Group Outlook 2005 — Group: Increase in sales and EBITA — Group: Capex (excl. financial assets) around €1bn (2004: €1bn) — Linde Gas: Increase in sales and EBITA — Linde Engineering: Sales and EBITA at least on last year‘s high level — Material Handling: Increase in sales and significant impro
Slide 15: Linde Gas
Linde Group Linde Gas 15
Slide 16: Global Market Positions 2004
Linde Group Global Market Positions 2004 #1 Northern Europe ASU 19 Ecovar 23 HyCo/CO2 17 #2 Filling Stations 35 #5 Western Europe #1 North America ASU 26 Strong regional positions Ecovar 74 Central & HyCo/CO2 17 Eastern Europe ASU 13 Filling Stations 64 ASU 31 Ecovar 71 Ecovar 25 Asia/ Pacific HyCo/
Slide 17: Sales by Region: 2004
Linde Group Sales by Region: 2004 - €4,003 million Asia 1.4% Australia / South America (2003: 0.8%) Africa1.1% 6.8% (2003: 1.0%) (2003: 6.2%) Germany 22.1% (2003: 22.3%) Q1 2005 YoY (excl. currency) North America 19.8% Germany 2.8% (2003: 21.3%) R o Europe 7.9% (5.4%) Rest of Europe N America 4.1% (
Slide 18: Sales development 2000-2004 by Product Segments
Linde Group Sales development 2000-2004 by Product Segments (Total sales, unconsolidated, in € million) 4,144 +15.5% 3,466 634 15% 12% 414 +53.1% 1,568 38% 45% 1,575 -0.4% Q1 2005 YoY (excl. currency) Healthcare* 11.1% (11.8%) 1,121 27% 26% +26.4% Cylinder 1.2% (0.5%) 887 Bulk 6.3% (5.7%) 17% +39.2%
Slide 19: EBITDA Margin (%)
Linde Group Linde has a consistently high EBITDA margin in the industry 28 27 26 EBITDA Margin (%) Linde 25 BOC Air Products 24 Air Liquide Praxair 23 22 21 2000 2001 2002 2003 2004 Source: Company reports, analyst reports 19
Slide 20: Improvement and Growth initiatives
Linde Group Improvement and Growth initiatives — Efficiency improvement programs — Product segments: On-site and Healthcare — Regions: Eastern Europe and Asia/Pacific 20
Slide 21: Efficiency Improvement Programs
Linde Group Efficiency Improvement Programs — „Fit-For-Future“ program will be completed this year and lead to total improvements of €150 million — Start of the „GAP“ program (Growth and Performance) in 2005 — 2/3 of initiatives focused on profitable growth — 1/3 of initiatives lead to efficiency im
Slide 22: On-Site
Linde Group On-Site — Sales 2004: €821million (2003: €772 million, +9% excluding currency) — High hurdle rates for new investments (IRR, ROCE) ensure high profitability — Stable business due to long-term take or pay contracts — Competitive advantage of Linde Engineering Strategy: — Focus on petroche
Slide 23: Linde Gas – On-site projects
Linde Group Linde Gas – On-site projects (start-ups 05/06, €380m Capex) Salzgitter AG Avesta Polarit - Germany - Finland Merchant Market Sokolovska uhelna - Russia - Czech Republic Bayer Oltchim S.A. Bayer - Germany - Romania - PR China BorsodChem - Hungary Cognis - France Jianlong Plansee - Austria
Slide 24: Healthcare
Linde Group Healthcare — Top 3 global market position — Sales 2004: €634 million (2003: €575 million, +14% excluding currency) — EBITA margin (appx. 20%) above gas industry average — Annual sales growth target >10%, low Capex ratio (1:1) supports growth Sales split 2004 (€ million): Q1 2005 YoY: The
Slide 25: Focus on Homecare
Linde Group Focus on Homecare: Leading market position in Europe and South America — Double-digit sales growth ahead — Homecare presence in 30 countries, but focus on selected geographies — Focus on respiratory therapy — Selective acquisitions to strengthen regional market position in Europe* *Succe
Slide 26: Eastern Europe
Linde Group Eastern Europe — Fastest growing region in Europe, double-digit growth rates predicted to continue — Linde sales 2004: €430 million (2003: €400 million, +11% excluding currency) — Dominant position: Market shares >> 40% in H, CZ, PL, ROM, Slovakia, Baltics — Ongoing double-digit sales gr
Slide 27: Asia/ Pacific
Linde Group Asia/ Pacific — Sales 2004 increased to €94 million (2003: €62 million) — Acquisitions in 2004 strengthened market position Top priority: China — Well positioned in regions Shanghai and Fujian — Target: Build-up „one-stop supplier“ position in each region Linde is in — Focus on On-site b
Slide 28: Linde Engineering
Linde Group Linde Engineering 28
Slide 29: 2004 Sales and Order intake
Linde Group 2004 Sales: €1,581 million, 2004 Order intake: €1,525 million Sales by Regions Order Intake by Business Segments Asia/Pacific/ Africa Others 29% 15% ASU 32% Natrural Gas 13% South Europe America 61% 1% Syngas 12% North America 9% Olefin 28% 29
Slide 30: Market positions by product segment
Linde Group Market positions by product segment Expertise and focus are key to retaining technology leadership Top 3 No. 1 Olefins (29% MS) Air separation (>40% MS) Syngas (25% MS) Natural gas (9% MS) Top 3 Top 3 30
Slide 31: Strengths
Linde Group Strengths — Focussed player with Top 1-3 position in all product segments — Excellent order situation (2004 around €1.5 bn, backlog > €2.3 bn) — Promising project outlook for 2005 and onwards — Stable business development due to balanced portfolio of product segments — Excellent risk and
Slide 32: Material Handling
Linde Group Material Handling 32
Slide 33: Material Handling: Multi-brand Strategy
Linde Group Material Handling: Multi-brand Strategy Linde – Product excellence The Linde brand with its innovative vehicle, offers solutions which are technically demanding and value for money as well as comprehensive service competence. The aim is to become the leading provider of products and serv
Slide 34: 2004 Sales by Regions and Brand
Linde Group 2004 Sales: €3,372 million Regions Unit Sales by Brand (Total: 120,000) Asia/Pacific/ South Africa OM Pimespo America 8% 14% 1% North America 3% STILL 29% Linde 57% Europe 88% 34
Slide 35: Improvement and Growth Initiatives
Linde Group Improvement and Growth Initiatives — Efficiency improvement programs — Product innovation in all product segments and across all brands — After sales service business and leasing — Regions: Eastern Europe and China 35
Slide 36: Efficiency Improvement Programs
Linde Group Efficiency Improvement Programs — „TRIM“ program will be completed this year and lead to improvements of €150m — Start of the „GO“ program (Growth and Operational excellence) in 2005 — Focus on sustainable efficiency improvement in core processes — R & D, production, logistics and procur
Slide 37: Innovation: Product Offensive 2005-2007
Linde Group Innovation: Product Offensive 2005-2007 Linde STILL OM Pimespo Large scale product roll-out Counterbalanced 5 3 4 Trucks Warehouse Trucks 7 8 13 2005 2006 2007 37
Slide 38: Full range of After-Sales-Service Activities
Linde Group Linde offers a full range of After-Sales-Service Activities — 2004: 40% of Sales, > 50% of Profit - Service/ Fleet New Spare Used Long-term Rental Leasing Mainte- manage- trucks Parts trucks warranties nance ment — Well positioned to control end-market Used Trucks — Development of new ma
Slide 39: Good market position in Eastern Europe and China
Linde Group Good market position in Eastern Europe and China Eastern Europe: — Strongest growing market in Europe, high growth rate in the high margin Counterbalanced Truck business — Good market position in key markets — Strong growth pattern in the Counterbalanced Truck segment — Already dense sal
Slide 40: Appendix
Linile Linde Group Appendix
Slide 41: Group Income Statement
Linde Group Group Income Statement (excl. Refrigeration & amortization of goodwill) — Sales up 6.9% to €2,124 million, EBITA up 13.0% to €165 million — Financial result improved In € million Q1 04 Q1 05 ∆ Sales 1,986 2,124 6.9% EBITDA 332 357 7.5% EBITA 146 165 13.0% Financial result -38 -30 21.0% E
Slide 42: Group Key Financials
Linde Group Group Key Financials (Q1 2004 not adjusted) In € million Q1 04 Q1 05 Operating cash flow 201 140 Capex (excl. financial assets) 160 198 Net interest -38 -30 EBITDA / Net interest 8.7 11.9 Net debt* 2,380 2,005 Gearing ** 60.3 47.5 * Financial debt – cash & cash equivalents and securities
Slide 43: Linde Gas & Engineering
Linde Group Linde Gas & Engineering — Sales up 9.0% to €1,339 million — EBITA increase of 11.8% to €170 million In € million Q1 04 Q1 05 ∆ Sales 1,228 1,339 9.0% EBITDA 258 276 7.0% Margin 21.0% 20.6% EBITA 152 170 11.8% Margin 12.4% 12.7% EBTA 134 149 11.2% EBT 108 149 38.0% 43
Slide 44: Linde Gas
Linde Group Linde Gas — Sales up 7.8% to €1,038 million — EBITA increases 10.1% to €164 million In € million Q1 04 Q1 05 ∆ Sales 963 1,038 7.8% EBITDA 250 268 7.2% Margin 26.0% 25.8% EBITA 149 164 10.1% Margin 15.5% 15.8% EBTA 127 143 12.6% EBT 103 143 38.8% 44
Slide 45: Linde Gas - Sales bridge Q1 2004 / 05
Linde Group Linde Gas - Sales bridge Q1 2004 / 05 +2.0% €1,038m +5.2% +0.2% +0.4% €963m +7.8% Sales 2004 Volume / Price FX Gas price effect New Sales 2005 Consolidation 45
Slide 46: Linde Gas – Regional Sales
Linde Group Linde Gas – Regional Sales — Stable growth continues in Europe, driven by Eastern Europe — North America sales still affected by currency situation In € million Q1 04 Q1 05 ∆ ∆ excl. currency Germany 217 223 2.8% 2.8% Europe excl. Germany 469 506 7.9% 5.4% North America 195 203 4.1% 9.1%
Slide 47: Linde Gas – Product Segment Sales
Linde Group Linde Gas – Product Segment Sales — Highest growth rates in On-site business — Double-digit growth rates continue in Healthcare — Cylinder business stable In € million Q1 04 Q1 05 ∆* ∆* excl. currency Bulk 263 279 6.3% 5.7% Cylinder 386 391 1.2% 0.5% On-site** 195 231 18.1% 18.6% Healthc
Slide 48: Linde Engineering
Linde Group Linde Engineering — Strong increase in sales to €357m, up 23.1% — EBITA improved to €16m (2004: €5m) In € million Q1 04 Q1 05 ∆ Sales 290 357 23.1% EBITDA 9 20 - Margin 3.1% 5.6% EBITA 5 16 - Margin 1.7% 4.5% EBTA 7 17 - EBT 6 17 - 48
Slide 49: Material Handling
Linde Group Material Handling — Sales increase 3.6% to €771 million — EBITA up 8.7% to €25 million In € million Q1 04 Q1 05 ∆ Sales 744 771 3.6% EBITDA 99 105 6.1% Margin 13.3% 13.6% EBITA 23 25 8.7% Margin 3.1% 3.2% EBTA 15 17 13.3% EBT 14 17 21.4% 49
Slide 50: Comparatives excluding Refrigeration and the amortization of goodwill
Linde Group Comparatives excluding Refrigeration and the amortization of goodwill In € million January – March 2004 Group income Refrigeration Amortization of Group income statement goodwill (other statement, business comparable segments) figures EBITA 117 29 146 Amortization of goodwill -30 1 29 0
Slide 51: Linde Engineering – Change of accounting treatment with regard to EBITA
Linde Group Linde Engineering – Change of accounting treatment with regard to EBITA Up to now: So far, EBITA of LE included the following: Interest income from long-term construction contracts. Other interest income. Starting Due to the change, the following applies: 31/12/04: now, only the interest
Slide 52: Linde Engineering - Earnings bridge old and new method
Linde Group Linde Engineering - Earnings bridge showing difference between old and new method 2003 2004 2004 61 82 13 -13 +13 -2 -5 -3 -4 15 -15 +15 17 14 54 69 75 46 52 32 EBITA Other EBITA Other Other Goodwill EBT EBITA Other EBITA Other Other Goodwill EBT „old“ interest „new“ interest interest am
Slide 53: Engineering EBITA 2004
Linde Group Linde Engineering EBITA 2004 40 36 35 32 30 25 € million 20 20 17 18 14 15 10 8 5 5 0 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Old method New method 53
Slide 54: Corporate – Change of accounting treatment with regard to EBITA
Linde Group Corporate – Change of accounting treatment with regard to EBITA Up to now: So far, EBITA of Corporate included the following: Intercompany profit elimination between LE & LG due to sale of plants. Reclassification of recognized interest income from EBITA to the financial result . Startin
Slide 55: Corporate - Earnings bridge old and new method
Linde Group Corporate - Earnings bridge showing difference between old and new method € million -158 -172 -119 -99 -121 20 13 17 23 Old Old Consolid- Financial Other New Reversal of Actual New method method ation result from interest method Refrigeration 2004 method 2003 2004 LG/LE long-term income
Slide 56: Investor Relations Contacts
Linde Group Investor Relations Contacts Thomas Eisenlohr, Head of Investor Relations Tel: +49 611 770 610 E-mail: thomas.eisenlohr@linde.de Robert Schneider Tel: +49 611 770 270 E-mail: robert.schneider@linde.de Jo Raja Tel: +49 611 770 128 E-mail: jo.raja@linde.de 56